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ACCOUNTING 0452/13
Paper 1 May/June 2019
1 hour 45 minutes
Candidates answer on the Question Paper.
No Additional Materials are required.
Write your centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Where layouts are to be completed, you may not need all the lines for your answer.
The businesses mentioned in this Question Paper are fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.
DC (MM) 181611
© UCLES 2019 [Turn over
2
For each of the parts (a) to (j) there are four possible answers, A, B, C and D.
Choose the one you consider correct and place a tick (3) in the box to indicate the correct answer.
1 (a) An invoice for the purchase of goods on credit, $980, was incorrectly recorded in the
purchases journal as $890.
A commission
B complete reversal
C original entry
D principle [1]
1 carriage inwards
2 purchases
3 purchases returns
4 Sadie, a credit supplier
A 1, 2 and 3
B 2 and 3 only
C 2 only
D 4 only [1]
(c) Bingwa purchased premises costing $85 000 in February 2018. Identical premises to those
owned by Bingwa were sold in April 2019 for $98 000. No adjustment was made in Bingwa’s
accounting records in April 2019.
A business entity
B materiality
C money measurement
D realisation [1]
$
non-current assets 103 650
inventory 4 960
insurance prepaid 130
trade payables 5 380
petty cash 100
rent receivable prepaid 240
bank overdraft 2 900
trade receivables 5 120
A $105 440
B $105 920
C $105 960
(e) On 1 February Ahmed purchased goods on credit from Zaffar. He returned these goods on
8 February.
(f) Athena is both a customer and a supplier of Heidi. Athena’s account in Heidi’s sales ledger
showed a debit balance of $340 and her account in Heidi’s purchases ledger showed a credit
balance of $260.
Which entry would Heidi make in her sales ledger control account?
A credit $80
B credit $260
C debit $80
(g) An advertising expenses account had a credit balance of $100 on 1 January 2018.
During the year ended 31 December 2018 advertising expenses paid totalled $2830.
This included $45 for the following financial year.
Which journal entry is required to transfer the advertising expenses to the income statement
on 31 December 2018?
debit credit
$ $
advertising expenses 2685
A
income statement 2685
advertising expenses 2885
B
income statement 2885
income statement 2685
C
advertising expenses 2685
income statement 2885
D [1]
advertising expenses 2885
During the year ended 30 April 2019 he introduced his personal motor vehicle, $12 500, into
the business. His drawings during the year ended 30 April 2019 were $7500.
A loss $1350
B loss $8650
C profit $1350
(j) Amber updated her cash book after receiving her bank statement. The updated cash book
balance was an overdraft of $250.
The bank statement did not include cheques not presented, $96, and amounts not credited,
$183.
A $163 credit
B $163 debit
C $337 credit
[Total: 10]
2 Nabil owns a food store. He purchases goods on credit terms and sells on cash terms.
Nabil’s financial year ends on 31 March.
Nabil’s receipts and payments during the year ended 31 March 2019 included both capital and
revenue items.
REQUIRED
(a) State whether each of the following represents capital expenditure, revenue expenditure, a
capital receipt or a revenue receipt.
(b) Complete the table by stating the double entry needed to record each of the following
transactions which took place in March 2019.
REQUIRED
(c) Complete the table by placing a tick (3) in the correct column to indicate where the balance of
each of the accounts would appear in Nabil’s trial balance on 31 March 2019.
debit credit
column column
rent and rates 3
capital
motor expenses
purchases returns
discount received
insurance
bank overdraft
operating expenses
drawings
carriage outwards
[6]
[Total: 21]
3 Hamila is a trader. Her financial year ends on 28 February. All goods are bought and sold on credit
terms.
2019
16 Safiya purchased goods on credit, list price $250, less 20% trade discount
18 The bank returned Safiya’s cheque because of insufficient funds in the account
REQUIRED
(a) Prepare the account of Safiya as it would appear in Hamila’s ledger for the month of
February 2019.
Hamila
Safiya account
[6]
(b) Complete the bad debts account in Hamila’s ledger for the month of February 2019.
Close the account by making an appropriate year-end transfer.
Hamila
Bad debts account
Hamila maintains a provision for doubtful debts. The following account appeared in Hamila’s
ledger.
Hamila
Provision for doubtful debts account
REQUIRED
(c) (i) Explain the following entries in the provision for doubtful debts account.
Name the account in which the double entry would be made for each item.
State whether the account would be debited or credited.
Explanation .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
Explanation .......................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
(ii) Explain the following entry in the provision for doubtful debts account.
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
(d) Explain how Hamila is applying the principle of prudence by maintaining a provision for
doubtful debts.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
(e) Explain how Hamila is applying the principle of accruals (matching) by maintaining a provision
for doubtful debts.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
(f) Suggest two ways in which Hamila could reduce the possibility of bad debts.
1 ................................................................................................................................................
2 ................................................................................................................................................
[2]
[Total: 20]
The equipment had been purchased on 1 April 2015 for $4000 and had been depreciated using
the reducing (diminishing) balance method at 20% per annum. A full year’s depreciation was
charged in the year of purchase, but no depreciation was to be charged in the year of disposal.
REQUIRED
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [5]
On 1 January 2018 Sam purchased new office equipment costing $8000 on credit from C Limited.
A narrative is required.
Sam
General Journal
The new office equipment was expected to be used for 5 years and have a residual value of
$2000.
Sam was undecided about which method of depreciation to use for the new office equipment.
REQUIRED
(c) (i) Calculate the annual depreciation on the new office equipment using the straight-line
(equal instalment) method.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [2]
(ii) Calculate the depreciation for the first year on the new office equipment using the
reducing (diminishing) balance method at 20% per annum.
...........................................................................................................................................
...........................................................................................................................................
...........................................................................................................................................
..................................................................................................................................... [1]
REQUIRED
(d) Prepare a journal entry to record the transfer to the income statement of the depreciation on
office equipment for the year ended 31 December 2018.
A narrative is required.
Sam
General Journal
Sam’s book-keeper started to maintain a petty cash book on 1 April 2019. On that date $150 was
placed in the petty cash box. This was to be the monthly imprest which was to be restored on the
first day of each month.
At the end of April 2019 Sam discovered that only a few entries had been made in the petty cash
book for the month.
The following information about the petty cash transactions for April 2019 is available.
2019 $
30 Paid cleaner 56
REQUIRED
(e) Complete the entries for the transactions on 3 April and 6 April in the petty cash book on the
page opposite.
Enter the transactions for 11 April to 30 April in the petty cash book.
Balance the petty cash book on 30 April and bring down the balance on 1 May 2019.
[Total: 24]
© UCLES 2019
received paid expenses accounts
$ $ $ $ $ $
2019
0452/13/M/J/19
.................. .................. ....................................................... .................. .................. .................. .................. ..................
[Turn over
16
5 Mostafa and Salma are partners in a wholesale business. Their financial year ends on 30 April.
When they started the business they drew up a partnership agreement. The terms of the agreement
included the following.
At 1 May 2018
Mostafa Salma
$ $
Capital account 45 000 25 000
Current account 3 250 credit 1 920 debit
On 1 February 2019 the partners agreed that Mostafa’s salary should be increased to $15 000 per
annum.
Mostafa Salma
$ $
Drawings 10 000 8 000
The profit for the year ended 30 April 2019 was $14 820.
REQUIRED
(a) Suggest one reason why interest on capital was included in the partnership agreement.
...................................................................................................................................................
............................................................................................................................................. [1]
(b) Suggest one reason why interest on drawings was included in the partnership agreement.
...................................................................................................................................................
............................................................................................................................................. [1]
(c) Suggest one reason why a salary for Mostafa was included in the partnership agreement.
...................................................................................................................................................
............................................................................................................................................. [1]
(d) Prepare the profit and loss appropriation account for the year ended 30 April 2019.
$ $
[8]
(e) Complete the current account of Mostafa for the year ended 30 April 2019. Balance the
account and bring down the balance on 1 May 2019.
[Total: 16]
6 S Limited was formed on 1 May 2018. On that date the company issued ordinary shares and 5%
debentures.
At the end of the financial year on 30 April 2019 the following financial statements were prepared:
Income statement
Statement of changes in equity
Statement of financial position
REQUIRED
(a) Name the financial statement in which each of the following items would appear.
Some items may appear in more than one statement.
If the item does not appear in any of the financial statements write ‘No entry’.
financial statement
Wages accrued at 30 April 2019 Income statement
Statement of financial position
[8]
The directors of S Limited wish to raise funds for expansion. They are undecided whether to issue
additional ordinary shares or additional 5% debentures.
REQUIRED
(b) Complete the table by placing a tick (3) in the correct column to indicate whether each
statement is true or false.
true false
(c) Suggest two ways in which the ordinary shareholders may be affected if the directors decide
to raise funds from an issue of debentures.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
[2]
The directors of S Limited are concerned about the working capital of the company at the end of
the first year of trading.
$
Inventory 27 400
Trade payables 28 700
Trade receivables 25 200
Bank overdraft 10 800
REQUIRED
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
(f) Explain why the quick ratio is more reliable than the current ratio as an indicator of liquidity.
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
............................................................................................................................................. [2]
(g) Complete the table by placing a tick (3) in the correct column to show how each of the
following would affect the working capital of S Limited.
(h) Suggest two problems the directors of S Limited may encounter if the working capital is
inadequate.
1 ................................................................................................................................................
...................................................................................................................................................
2 ................................................................................................................................................
...................................................................................................................................................
[2]
[Total: 29]
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